Domestic problems blamed for low exports to India

- POST REPORT, Kathmandu

Aug 19, 2014-

Structural barriers in the country such as insufficient power, poor infrastructure, labour problems and excessive politicization of labour, among other reasons, are responsible for the low level of exports to India along with policy and procedural barriers in the southern neighbour, said Nepal Rastra Bank (NRB) in its report entitled An Assessment of Export Barriers of Nepalese Products to India.

“Due to lack of a conducive environment in the country, competitive capacity has declined, the number of products for exports have declined significantly and export based industries have been pushed to the limit in terms of their size and numbers,” said the study report.

Nepal suffered a trade deficit of Rs 377 billion with India as of the first 11 months of the last fiscal year, according to NRB. The country’s exports to India amounted to Rs 54 billion against imports of Rs 431 billion.

According to the report, the research team consulted with 120 people comprising exporters, customs and tax officers, clearance agents, container and truck business representatives and quarantine officials to find out the status of export barriers.  

The research team talked to respondents in key cross-border trade routes including Kakkarbhitta-Panitanki, Biratnagar-Jogbani, Birgunj-Raxaul, Bhairahawa-Sunauli, Nepalgunj-Rupaidia and Dhangadhi-Gaurifanta. The central bank had outsourced the study to a group of researchers from Patan Multiple Campus.

According to the report, almost 50 percent of the respondents or stakeholders experienced procedural barriers, however, the intensity of the barriers has been reported as low or moderate. Quarantine approval from Indian authorities has also been marked as a major procedural barrier for promoting exports to the southern neighbour.

One-third of the respondents cited institutional barriers for the low level of exports to India. The intensity of institutional barriers was perceived to be low by exporters and clearing agents while quarantine officials said it was high.

Policy barriers are obstacles created by current policies that raise the cost of production of exportable commodities, raise export prices of exportable commodities and cause loss of comparative advantage of trade.

 

Published: 20-08-2014 09:30

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